GitHub Takes $100M Investment From Andreessen Horowitz

The business of software development continues to attract attention from top-flight investors, as GitHub announced its acceptance of a $100 million round of funding from Andreessen Horowitz.

Software runs the world and as GitHub enables teams of developers to work together easier and better, it made for a nice investment for Andreessen Horowitz. In fact, the $100 million the venture capital firm invested in GitHub is its single largest investment to date.

GitHub is a rapidly growing collaborative software development platform and the leader in public and private code sharing and hosting. GitHub is a Web-based hosting service for software development projects that use the Git revision control system. GitHub offers both paid plans for private repositories, and free accounts for open-source projects. GitHub is the most popular Git hosting site, and the most popular open-source hosting site. In less than five years, GitHub has become the worlds largest and most trusted code sharing and hosting community with more than 1.7 million users and more than 3 million Git repositories. GitHubs highly collaborative environment, which includes GitHub.com, desktop and mobile apps, and GitHub Enterprise, enables developers and companies across a broad spectrum.

Andreessen Horowitz General Partner Peter Levine said the $100 million not only marks the VC firms largest investment, it also is the first and only outside investment GitHub has ever taken. Rather than look for funding, GitHub has up to now been satisfied with bootstrapping. The company had been approached before, but turned down investment as it has been profitable practically from day one, according to its founders.

So what did Andreessen Horowitz, also known as a16z, see in GitHub that made it so attractive. According to Levines July 9 post, it included:

They took an old technology category and turned it on its head. Source Code Management (SCM) is the second most fundamental tool for a programmer after compiler and development tools. It stores, versions and branches source code being developed by teams of programmers. At scale, these systems become highly complex and often difficult to manage. In addition, historically SCMs have been anti-social. The No. 1 conversation they generate is referred to as: Who broke the build? GitHub solves these two problems and dramatically expands the category by changing the old model in two important ways:

1. Rather than forcing every development team in the world to deploy their own SCM, GitHub runs one big SCM in the cloud and the management issues vanish.

2. GitHub organizes projects around people rather than code.

Levine added that Because modern programming tends to be about assembling codein the form of libraries, open source work, etc.as well as writing it, code tends to belong in one place where its easy to access. That place has become GitHub with over 3 million Git repositories. Levine will join GitHubs board of directors.

Meanwhile, why did GitHub agree to the funding? Tom Preston-Werner, in a separate July 9 post, said it was simply because the investment was a way for the company to do more, faster.

Why take the money? Because we want to be better, Preston-Werner said. We want to build the best products. We want to solve harder problems. We want to make life easier for more people. The experience and resources of Andreessen Horowitz can help us do that.

GitHub obviously struck a chord with developers and was doing fine all by itself. In four short years we've done a lot we're really proud of, Preston-Werner said. We've shipped great native apps like GitHub for Mac and GitHub for Windows. We've made using GitHub from within Eclipse even easier. We've contributed to killer open source projects like libgit2 and git. We've thrown hundreds of drinkups, sponsored tons of conferences, drawn a bunch of octocats, and, of course, made building software even better with github.com and GitHub Enterprise.

Moreover, Preston-Werner said GitHubs goal is to become more generally available. We want GitHub to be even easier for beginners and more powerful for experts, he said. We want GitHub everywherewhether you use Windows or Mac or Linux or some futuristic computer phone that hasn't been invented yetwe want GitHub to be an awesome experience. We want to make it easier to work together than alone. We want to keep changing the way software is developed for the better by making collaborating easier and sharing a no-brainer.

In August 2011, Andreessen Horowitz co-founder Marc Andreessen penned an essay in the Wall Street Journal entitled Why Software Is Eating The World, that described how software in integral to just about everything that matters in the world today. GitHub, as a social hub for hosting software development projects, plays a key role in the creation of much of that software.